Correlation Between U Power and Pure Cycle
Can any of the company-specific risk be diversified away by investing in both U Power and Pure Cycle at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining U Power and Pure Cycle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between U Power Limited and Pure Cycle, you can compare the effects of market volatilities on U Power and Pure Cycle and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in U Power with a short position of Pure Cycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Pure Cycle.
Diversification Opportunities for U Power and Pure Cycle
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between UCAR and Pure is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Pure Cycle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Cycle and U Power is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on U Power Limited are associated (or correlated) with Pure Cycle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Cycle has no effect on the direction of U Power i.e., U Power and Pure Cycle go up and down completely randomly.
Pair Corralation between U Power and Pure Cycle
Given the investment horizon of 90 days U Power Limited is expected to generate 35.47 times more return on investment than Pure Cycle. However, U Power is 35.47 times more volatile than Pure Cycle. It trades about 0.05 of its potential returns per unit of risk. Pure Cycle is currently generating about 0.04 per unit of risk. If you would invest 0.00 in U Power Limited on August 31, 2024 and sell it today you would earn a total of 616.00 from holding U Power Limited or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.36% |
| Values | Daily Returns |
U Power Limited vs. Pure Cycle
Performance |
| Timeline |
| U Power Limited |
| Pure Cycle |
U Power and Pure Cycle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and Pure Cycle
The main advantage of trading using opposite U Power and Pure Cycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power position performs unexpectedly, Pure Cycle can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Pure Cycle will offset losses from the drop in Pure Cycle's long position.| U Power vs. Kaixin Auto Holdings | U Power vs. Uxin | U Power vs. SunCar Technology Group | U Power vs. Carvana Co |
| Pure Cycle vs. California Water Service | Pure Cycle vs. Consolidated Water Co | Pure Cycle vs. SJW Group Common | Pure Cycle vs. Middlesex Water |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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